How does the Financial Market work?

Before falling headlong into FX Market, let's take one thing into account: How does the Financial Market work?

As already explained above, the Forex Market is based on the exchange of international currencies, so that there is a valuation and a devaluation of the currency (Yes devaluation! Because we buy cheaper and sell when it is valued), the Stock Exchange of each Nation, is who dictates the Values ​​of Change.

What is the Stock Exchange?

The Stock Exchange is in short a huge Global Network, responsible for organizing the Market, responsible for moving huge amounts of money every day.

In total, more than sixty trillion (60,000,000,000,000) euros are traded per year. More than the value of all goods and services throughout the world economy.
However, Iphones or Chinese products would never be the strength of this market, but predominant are Capital Securities.

Securities, participation in companies, are the most active, mainly in the form of Shares.
An Action represents a stake in a company.

Why Sell Stocks?
Well, to begin with, the value of a stock is related to the company behind it. If you think that a company, will increase its value against the Market, we can exemplify:
Let's imagine that a big company like Twitter is a Pizza, and you buy a Slice of that Pizza Company, we know that the bigger the size of the Pizza, the bigger the size of each Slice (Action). Let us suppose that Twitter can increase its profits a lot with a new business model.
The size of Pizza companies will also increase and as a result, the value of their stock as well. This is great for shareholders.
In short: A slice of the Twitter Pizza that you perhaps bought for 40 euros could now be worth 55-60 euros.
And when it is sold, it represents a profit of 15 to 20 euros per share!

But what does Pizza (Twitter) gain from this?
The company that you chose for your business, can raise funds by selling stocks and investing or expanding their business.
Facebook (Your Biggest Competitor), for example, earned $ 16 billion (sixteen billion dollars) from its listing on the Stock Exchange.

Stock trading, though, is often a game of chance. No one can say which company will do well and which will not. If a company has a good reputation, investors will support it.
A company with bad reputation or poor performance will find it difficult to sell its shares.

Unlike a standard market, where we: Let's go after the Product> We choose the right product for a certain function> We pay the product and take it home on the Stock Exchange, only virtual goods are available to buy.
They appear in the form of stock prices and tables on monitors. Such prices may suddenly be unannounced: Rise or Fall in seconds. Because of this, the Shareholders must act quickly so as not to miss a good opportunity. Even a simple rumor (Speculation) can result in the demand for a falling stock, regardless of the actual value of the company. Of course the opposite is also possible.
If a large number of people buy weak stocks (Companies that are low in value at the time of purchase.) Buying because if they see, for example, great potential (speculation) behind an idea, their value will increase as a result.

In particular, young companies, which are now launching the market, can benefit from this. Even though their sales may be falling, they can generate money by putting their stock.

At best, this will result in your idea becoming reality.
At worst, this will result in a speculative bubble with nothing but hot air. And like the case with bubbles, at some point, they will burst.

The value of the thirty largest companies in Germany is summarized in what is known as the DAX stock index.
The DAX shows how good or bad these big companies are doing economically in real time. Of course! the Stock Exchange of other countries also has its own indexes. And all these markets together create a global network market.